Frankly, there was a time when I thought the Journal was better on business/economic news than the Times. But no longer; and it’s not just things like referring to the estate tax as the “death tax” in news stories. Overall, coverage is getting cruder, with more tendency to report opinions as if they were news, and substitute prejudices for real analysis.

And this bad news is good news. There’s a pretty good chance that we will end up with only one great national newspaper. And I know which paper that should be …

Krugman’s prejudice matches mine. I prefer reading the New York Times.

But one of the things Paul Krugman does better than most is argue from data or a testable model – but he lapsed badly here. Below are the top 15 newspapers in the US by circulation now and two years ago. [The sources are revisions to the relevant Wikipedia page.]

No paper has – in this data – maintained circulation. For most papers the fall has been catastrophic. (The effects of falling circulation on pulp pricing is background to my next post…)

Nonetheless, it is pretty hard to see disaster or even the “great recession” in the Wall Street Journal numbers. I gather of late that the fully paid circulation of the Wall Street Journal is rising again – albeit slowly. None of this says that Rupert did or did not overpay for Dow Jones but Paul Krugman’s argument from prejudice rather than data about the New York Times possibly becoming the nations largest newspaper because of editorializing is – well – hogwash.

What sells the news?

Paul Krugman gives his view of what sells the news. It is a view that fits the vision of the Gray Lady quite well: a clear distinction between news pages and editorial pages, facts supported by data etc. That is also how I want my news presented. However the evidence that that sells the news is quite thin. Whatever Rupert did to the WSJ Journal (that which Felix Salmon and Brad Delong rail against) appears to be working.

More generally opinion dressed up as news, especially when it panders to the prejudice of your readers or viewers works seems to sell really well. A while back I gave a quarterly series of operating profits (in millions) for Fox Cable Networks – a business dominated by Fox News. Here they are again: 197, 262, 211,194, 249, 275, 282, 284, 289, 337, 330, 313, 379, 428, 429, 434, 495.

There are few businesses with growth in operating profits without substantial capital expenditure that look anything like that. Well Fox News gets even better (at least from the perspective of a News Corp shareholder). The latest number is was $604 million operating profit for the quarter ended 30 December 2009.

I am not a newspaper guy – but I have watched for long enough to form a supported opinion – which is that opinion and prejudice sell media – especially when they back the readers’ opinion and prejudice.* It is respectable to present an alternative viewpoint – but only if it is a caricature – something weakly presented to rile the audience – but only till they pick it apart and make themselves feel smug. The lightweight Alan Colmes – the token Fox News Liberal – and the equally lightweight Miranda Devine – the conservative for the Sydney Morning Herald fit this bill.

Rupert knows this – and his news outlets all blur opinion and fact. If his audience is left-leaning he will blur from that side (he once owned the Village Voice) and he knew enough to leave its politics alone. He is (obviously enough) more comfortable with right-wing media markets (with a special love for “working class tories”) – but again – it might just be that is where the big markets are…

Krugman however insists on wonkish articles arguing closely from data. Those articles are like eating spinach. Reading them is good for you but you would rather have ice cream. But sometimes – as he did this time – he lets his prejudice out and argues like the Liberal equivalent of Fox News. His prejudice matches mine – and I love him for it. I suspect it also increases his value as an author. Advice to Paul: get it wrong more often and ask for a pay rise.

John

*Local newspaper guys – who know far more about this than I ever will – say that what sells newspapers is local relevance. All politics is local (but the internet is global). Readers like to see pictures of themselves and their schools and teachers and articles about their roads and public transport.

32 comments:

I think you are mistaking what Krugman is saying. He isn't saying that the WSJ won't do well. It will do well financially, like all of Murdoch's stable does well, by pandering to what the paying public wants. That's why Rupert bought it when it was not doing well. The people who will buy it are the people who watch CNBC and Fox Business for their investment advice. But as a newspaper of record, well, that's another story. You can't have your cake and eat it too.

The NY Times has it's prejudices underlying selection of news stories and phrasing as well as Fox or the WSJ. I think you just prefer one over the other.

Just a few days ago they had a news piece taking apart people involved in the Tea Party movement. They were presented as dumb, white, rural, uneducated, etc. Here;s the link: http://www.nytimes.com/2010/02/16/us/politics/16teaparty.html?ref=todayspaper&pagewanted=all

I think they would argue that the Tea Party crowd are dumb, white, rural, uneducated and that that is backed by fact..

Editorializing as news sells papers - especially when it matches the reader prejudice.

I am sure I can find a fair dumb, white, rural and uneducated contingent in the tea party crowd. I can also find - in the SAME CROWD a smart, savvy, worldly, scared of government because their last interaction was with the IRS, but otherwise self reliant small business crowd. And they will be the same crowd (though sometimes different members of the crowd).

Depending on who you are selling to you editorialize differently.

Krugman - who is usually data or model driven - fell into the same crap with that blog post. And he did it entirely non-self-reflectively...

Your chart is a bit misleading as wikipedia appears to have changed their definition of circulation. For example for the NYT it appears the old figure, 1627062, is for Sunday while the new figure, 927851, is for daily. The comparable Sunday figure would be 1400302. So the declines have not been as catastrophic as indicated.

1. As someone else said, the big number for The New York Times is for Sunday, which is still pretty impressive. Its daily circulation besides Sunday was about 1.1 million a couple of years ago, so the decline has been big, but not that big.

2. The Journal may have bigger numbers, but that's because it's the main business paper for this country and perhaps for much of the world. Granted, there's some overlap between all of the major papers, but if you figure that there's not a big difference between the Los Angeles Times, The Washington Post, and The New York Times, it's in some ways more impressive that The Times has maintained such a presence. It has never been the biggest paper in New York nor in the country as a whole, but it does still set the agenda. And even if The Journal does become on par as a first read with The Times, it's not as if The Times will fade away.

3. I'm curious about how successful The Journal really is, on its own. Even if it's marginally profitable, which is far from clear, it's not immune to the same pressures that The Times is facing. Perhaps it will be the last man standing, but maybe not.

4. As others have said, there's no reason why the Journal won't be popular and influential. The New York Post isn't exactly entirely objective, and while it still is influential, it doesn't set the agenda like The Times does. That's probably in large part because it is, well, less than dignified in a lot of ways. And while there's certainly a place for papers like that, the reason The Journal has such authority is because it presented the news as a serious matter, where truth was paramount, no matter who it offended. (Ralph Nader, among others, was a fan of the journalism it produced for so long.) If Murdoch diminishes that, then he starts to reduce the power of the paper.

5. Which is where other papers, like The Times, can come in. It's not a business paper, but there's no reason it can't expand in that regard, as others could. After all, if Murdoch and others mess with the credibility of the paper enough, while others sources fill the void, it won't be essential reading.

6. I think The Times should find some generous liberal investors and essentially expand operations just like that. Become half a business paper and half everything else, more or less. Pull the rug from underneath The Journal--offering buyouts to anyone who wants them, as it should have done years ago.

7. As far as Krugman goes, I think what he's saying is that The Times, like The Journal is/was, is concerned with the truth above all else. Its biases show at times, like any paper's do, but since it has no overarching agenda, it will be more credible over the long term. That's far from certain, but it's not a ridiculous notion.

Something different. Have you been there?http://www.theaustralian.com.au/news/nation/australian-beachgoers-from-far-and-wide-attracted-by-tsunami-warning/story-e6frg6nf-1225835366930

A tsunami made it a few months ago to California as well. It was predicted to be only in the 10cm - 60cms depending on locations. The surfers were disappointed. I think the only people who take tsunamis seriously in CA live in Crescent city. Location, location, location.

John, you're out of your depth here. The Times has intentionally reduced its total circ figures over the past few years as part of a strategy to focus on more affluent readers who their advertisers prefer to reach. Basically, they stopped trying to compete with the NYC tabs and hiked the price significantly. Also, the Times' circ figures are considered 'harder' than the Journal's because it has a higher percentage of readers who pay for their own subscriptions; the Journal relies heavily on financial firms buying bulk subscriptions for employees, some of whom probably never look at it. (USA Today figures are even softer because they're bloated by hotel giveaways.)So it's really more than a matter of plucking data from Wikipedia. You've got to know the significance of the data.

I subscribe to both the NYT and WSJ, and frankly I'm not fond of either. The Times is liberal to a fault. The Wall Street Journal, which used to be a great paper before Rupert, is trashy for the reasons you stated.I pay full price for my Times subscription, and I get my Wall Street Journal subscription via airline miles. The Journal is MUCH cheaper to buy if you are paying any attention. That said, I plan to let my Journal subscription lapse when it runs out (I've been getting the paper since 1969)and get the FT instead.

Only those sources with unique and useful content will survive. Not just unique. Not just useful. Both. If it's not unique, or not useful, then there is simply no reason to visit.

This may mean a simple contest of reporting scale, in which the largest player has the biggest staff and thus the best access to news. In such a contest, the WSJ is by far the most likely winner.

WSJ's foolish political bias could yet sink them, but if so, the winner might well be AP, not NYT. Why? Reporting scale. They are beginning to disintermediate their customers and sell direct.

Another very realistic possibility is that, among the traditional newspapers, there may be no for-profit survivors at all. News may instead be gathered by nonprofits, or by individuals. It may be edited by respected individual editors (some future variant of today's most respected bloggers, e.g. CalculatedRisk).

The whole concept of news aggregation arose because printing and delivery was expensive, requiring centralization within a corporation. That's all gone. There is no reason to expect that news will be delivered by large private companies 30 years from now.

John, please note that Prof. Krugman said 'great paper'. He didn't imply that the NYT would have leading circulation. USA Today has had massive and widespread ciculation for (twenty years now?), but it is not a great paper, never will be one, and probably doesn't aspire to be a great paper.

John: "John Hempton said... I think they would argue that the Tea Party crowd are dumb, white, rural, uneducated and that that is backed by fact..

Editorializing as news sells papers - especially when it matches the reader prejudice.

I am sure I can find a fair dumb, white, rural and uneducated contingent in the tea party crowd. I can also find - in the SAME CROWD a smart, savvy, worldly, scared of government because their last interaction was with the IRS, but otherwise self reliant small business crowd. And they will be the same crowd (though sometimes different members of the crowd). "

And I note that this blah-blah-blah crowd was surprisingly invisible and silent, until a president from the other party was elected.

At this point, I've seen this cycle before, with the 1990's militia/black helicopter guys.

Correction - Prof. Krugman said 'great national newspaper', which still excludes USA Today, but could include the NYT, which is more available and widely read than any paper except for USA Today and the WSJ.

Econbrowser helpfully bridges the value of newspaper editorial bias and the importance of being local ... the profit maximising strategy is to match the political biases of those in your local catchment... http://www.econbrowser.com/archives/2010/02/what_drives_med.html

Krugman may not be wrong in conflating news quality with success -- higher quality news commands a margin; anybody can make up stuff to match a reader's prejudice (and most do) but then you're just running a commodity business. Anyway, only time will tell.

Second, looking at circulation is problematic, as most of the NY Times is free. I used to buy the NY Times and The WSJ. A few years ago, I switched to reading the NY Times for free online, and subscribing to the WSJ. More recently, I've switched my subscription to FT (mostly because of the superior quality of the Opinion section) and still read the NY Times for free ....

You need to give it about 10 years before we determine who's right -- Krugman or you.

The New York Times very liberal opinions (think Krugman) do bleed into the news articles quite frequently. The connection is subtle,sometimes it is what is not reported and sometimes it is the basis for the so called facts (studies from left leaning organizations). The NYT is a liberal paper. The WSJ is a conservative paper.

To paraphrase Donald Rumsfeld, there are known knowns, there are known unknowns, and then there's the New York Times.News Corp papers may well be guilty of 'sexing up the dossier', but at least they don't studiously ignore news that doesn't confirm the editor's existing prejudices.

Paul Krugman has consistently been wrong about economics, as Marc Faber has repeatedly pointed out in the past year. Not to be outdone, he talks up the New York Times as the national newspaper, when circulation declines at the paper have been accelerating downward while the Wall Street Journal has grown both paper subscribers and paid subscribers online. As a business, The New York Times reminds me of General Motors in the last economic cycle; an effectively bankrupt company with a large pension liability, large debt load, short-sighted strategy to stay afloat, and business that has long been challenged by competition while management does very little to change. And to add insult to injury, Paul Krugman is a fan.

Your table is a bit misleading in that the circ figures for the NYTimes 2 years ago give the number for the Sunday edition - -daily circulation was more like 1.1 million. Still a big drop but not as dramatic as you make it appear. (serves ya right for relying on the wiki-boys)

Back in the early 1930s, Berle and Means, two architects of the SEC, pointed out that most news reporting was garbage. The exception was business news, because people take action based on business news. If a newspaper stops providing useful and accurate business news, then people will stop buying it. Murdoch has taken the WSJ and decreased its business news ratio and increased its garbage ratio, but as long as the business news remains timely and accurate, people will continue to buy the WSJ. On the other hand, the quality of the WSJ, as a news source, has fallen. (Let's face it, anyone who relied on the WSJ opinion pages for making business decisions would be either bankrupt or relying on a socialist government handout.)

The NYT has good business coverage, but they've been marketed as a general news source for some time now. When people think of buying online news, they think of the WSJ or Economist, not the Times. I'm not sure of which newspapers will be around in 20 years or in what form. When Berle and Means wrote, the WSJ was one of the papers they mentioned. So was the Herald Tribune.

In addition to other comments here about NYT Sunday circulation, it's worth noting that the WSJ has included (quite properly, I think) paid online subscribers for several years, which mostly explains its growth vs. the precipitous industry-wide decline.

Here's a selection of Krugmanisms from a few years ago. (It's aging, but who could keep up?) How data based are these?

My favorites are...

"the revenue that will be lost because of the Bush tax cuts ... would have been more than enough to 'top up' Social Security and Medicare, allowing them to operate without benefit cuts for the next 75 years."

... a dollar number off by a mere 14-digits at present value, as all contemporary reports from Treasury, CBO, GAO and academia said at the time -- which reports Krugman dismissed as mere media imcompetence or pro-Republican bias; and

"Is this the same country that we had in 1970? I think we have a much more polarized political system, a much more polarized social climate ...we're probably not the country of Richard Nixon..."

Yes, we miss the good old Nixon days of political harmony, with soldiers shooting students on campus at Kent State ...the Weather underground and SDS blowing up buildings as domestic terrorists ... regular summer race riots in the cities ... Spiro Agnew smoothing troubled waters...

Most voters (55%) don’t know enough about Paul Krugman to venture even a soft opinion about him. Those with an opinion are fairly evenly divided —- 22% favorable and 22% unfavorable ... with four percent (4%) voicing a Very Favorable opinion and six percent (6%) a Very Unfavorable view.

But if people are asked about "New York Times columnist Paul Krugman", the numbers shift significantly.

Once he is identified with that publication, his unfavorable ratings jump 15 points to 37%. The number with a Very Unfavorable view more than triples to 20%. However, Krugman’s favorable ratings show little improvement, inching up only three points to 25%...

John Fund was viewed favorably by 12% of voters and unfavorably by 22%. Just one percent (1%) had a Very Favorable opinion of him, and six percent (6%) offered a Very Unfavorable view.

However, when Fund was identified with The Wall Street Journal, his numbers jumped to 34% favorable and 20% unfavorable.

In the case of both Krugman and Fund, the change in perceptions between the two surveys says more about public perceptions of their newspapers than it does about the columnists themselves.

Another data point to note is that while the WSJ has been one of the very few newspapers to be successful at charging for Web content, the Times so far has failed totally at it.

"Revealed preference" about what readers think of the two papers.

From the Times' own most recent report on newspaper circulation....~~~~

U.S. Newspaper Circulation Falls 10%

The two-decade erosion in newspaper circulation is looking more like an avalanche, with figures released Monday showing weekday sales down more than 10 percent since last year...

USA Today ... [lost] the top spot in weekday circulation for the first time since the 1990s, to The Wall Street Journal.

The Journal’s circulation, just over two million, rose 0.6 percent.

It is one of a very few papers to sell online subscriptions, which are counted in the circulation total, helping The Journal, which does not publish on Sundays, defy the industry-wide decline. It has more than 400,000 digital-only subscribers, up by more than 100,000 from five years ago.

At The New York Times, which has repeatedly raised its prices in recent years, weekday circulation fell 7.3 percent, to about 928,000, the first time since the 1980s that it has been under one million...~~~~

Krugman can write what he wants today. But don't be surprised if in the end he winds up sending his resume over to Rupert.

""Is this the same country that we had in 1970? I think we have a much more polarized political system, a much more polarized social climate ...we're probably not the country of Richard Nixon..."

Yes, we miss the good old Nixon days of political harmony, with soldiers shooting students on campus at Kent State ...the Weather underground and SDS blowing up buildings as domestic terrorists ... regular summer race riots in the cities ... Spiro Agnew smoothing troubled waters..."

Krugman's point r. polarization is conventional wisdom in political science based on voting patterns. See this paper for an example. . That shows trends, while a chart here uses a similar approach to show the currents state of polarization in the state legislatures:

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